What Is The Zero Emission Vehicle (ZEV) Mandate?

What Is The ZEV Mandate?

The impending combustion engine ban coming into force in 2035 is something that a lot of people have on their minds. Whether you are an electric car supporter or not, it is hard to ignore the fact that eventually you may have to embrace the electric car lifestyle. Either that or will have to hold on to your petrol or diesel car for as long as possible after the deadline arrives.

Whilst there still remains an abundance of combustion engine cars on sale for the time being, you may find that that number will begin to decline quite rapidly thanks to new laws being brought in from the start of 2024. From 3rd January the Zero Emission Vehicle (ZEV) Mandate means that car manufacturers have to meet strict targets for the amount of brand-new electric vehicles they sell to their customers.

In what the government is claiming is the world’s most ambitious regulations on the sale of electric vehicles, from the 3rd January 2024, car manufacturers must ensure that 22% of the new cars (and 10% of new vans) are fully electric vehicles. To put that into perspective, the split throughout 2023 (before the mandate was brought in) was about 1 in every 7 cars, or 16.5%, but that is including company cars and has a lot to do with the Benefit in Kind tax breaks, only 1 in 11 of those electric cars sold is for a private buyer, which makes the overall private vehicle share just 1.5% (statistics by the Society of Motor Manufacturers and Traders, or SMMT). The ambitious target will grow year on year to fall in line with 100% of vehicles sold in time for the 2035 deadline.

Manufacturers who fail to meet those targets will see huge fines of £15,000 for each car, and £9,000 for each van, that they fall short of the target. Fines that are currently set to grow as the target gets more and more weighted towards electric car sales in the following years. £15,000 is a huge proportion of the cost of any car and a sign that the government expects the targets to be met no matter how strict or ambitious they are.

What Does It Mean For You?

So, what does this mean for the customer? It could mean that you may find certain brand-new electric cars, historically quite a bit more expensive than their combustion engine equivalents, may be subject to a bit of haggling on the price or the possibility of additional deposit contributions from the manufacturer or dealership. Even offering £10k off the list price of a car is cheaper than the fine the manufacturer would have to pay, so if targets are not being met, they may be more willing to offer better incentives to their customers.

Incentives currently offered by the government on electric vehicle purchases are heavily weighted towards personal tax benefits for electric company car users. This may mean that manufacturers focus more on ensuring they appeal to company car users in order to meet their targets, but it remains to be seen whether further incentives for private buyers will be introduced to try and persuade those on the fence to make the switch.

What About The Current Market?

There is no hiding the fact that electric car sales have not been as plentiful as originally expected. In fact, many manufacturers have already delayed or scaled back their initial expected adoption of all electric power for their line ups or for certain models. Over the past couple of years, the used car market across the board has had a ‘readjustment’, after riding a wave of higher prices post-lockdown, and a return to more ‘expected’ values especially with more expensive models. Yet electric vehicles on the whole are seeing a larger amount of depreciation and over shorter periods, making a new EV purchase seem a lot less tempting than an all new vehicle.

All of this means that manufacturers are under increased pressure to not only ensure they continue to maintain sales figures for their new cars, but also to tempt people to purchase a brand-new car at a time when used car prices are lower and more tempting than they have been for some time now. Encouraging potential buyers to purchase a new electric car in order to meet their targets might be more difficult than usual, and it is only going to get harder as the targets increase over the coming years.

Electric Car Finance

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